Kenneth Jull is an adjunct faculty member at the Faculty of Law.
In the anti-corruption field in Canada, the two leading cases are Niko and Griffiths Energy, which involved fines in the $10 million range following pleas of guilty. The newest Canadian case is Nordion Canada Inc., but this case sends a different message. Early self-reporting in this case was explicitly acknowledged in a settlement with the U.S. Securities and Exchange Commission (“SEC”) and may have been a factor in a decision by the RCMP to not proceed with any charges under the Canadian Corruption of Foreign Public Officials Act.[1]
The SEC Order, released on March 3, 2016, states that the Commission considered remedial acts promptly undertaken by Nordion, Nordion’s self-reporting, and their cooperation afforded the Commission staff. “Nordion self-reported the conduct to authorities in both the U.S. and Canada, conducted a thorough internal review, identified the illegal conduct, voluntarily produced witnesses from Canada for interviews in the U.S. and translated documents, and implemented substantial remedial measures to prevent future violations.”[2]
The SEC imposed a civil money penalty in the amount of $375,000. The SEC fine reflects the civil requirement in the United States to make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions.
The complex facts are set out in detail in the SEC Order. In essence, an engineer employed by Nordion represented that his purported childhood friend from Russia knew how to navigate the business landscape in Russia. Nordion had little or no prior experience using third-party agents in Russia. The engineer and an agent conspired to use a portion of the funds Nordion paid the agent to bribe Russian government officials to obtain approval for a liver cancer treatment. In an email, the engineer, who received kickbacks of some of the funds, told the agent, “Nordion does not want to see the bribes in your cost estimate and justification.” The engineer and the agent hid the scheme from Nordion by communicating in Russian and misrepresenting how the agent would use the funds it received from Nordion.
I have previously argued that Canada should consider a deferred prosecution program to reward self-reporting of misconduct. The U.S. system provides for non-prosecution agreements in rare cases, such as the Morgan Stanley case. Although the case of Nordion was not part of a formal non-prosecution program and has very unique circumstances, it is a step in the right direction.
